Guy Carpenter this month released its briefing on the 2020 reinsurance market renewal environment. Here are the key takeaways from our analysis of the renewal:
- The reinsurance market is healthy and responsive overall.
- Dedicated reinsurance capital remains abundant, with a modest increase over last year-end, driven by rated capital.
- Market adjustments are occurring in select segments, as risk profiles shift.
- Climate change assessment is a growing consideration.
- Renewal outcomes varied widely across individual programs, even within the same lines of business and geographies.
- While capital levels remain robust, allocated capacity tightened notably in stressed classes.
- Guy Carpenter’s Global Property Catastrophe Rate-on-Line (ROL) index increased approximately 5 percent, based on preliminary calculations.
- The US casualty market saw more consistent firming than the property market, with additional signs of hardening in some non-US regions.
- Non-loss-impacted specialty programs renewed broadly flat or slightly reduced, while loss impacted programs in lines of business that suffered sizeable losses through 2019, such as aviation, saw pockets of (in some cases significant) rate increases.
- The market faces a call to action – as the world becomes a riskier place, capital providers, underwriters and brokers are focusing on solutions that move the global marketplace forward.